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SWX Swiss Exchange successfully launched its clearing service using SIS x-clear as Central Counterparty (CCP) on Friday 7 September 2007.
Over 237 securities became eligible for clearing on the first day of trading for cleared products and some 29,322 trades were matched on the Exchange resulting in 58,644 transactions being cleared by SIS x-clear. Settlement of SWX cleared products, using the existing services of SIS SegaInterSettle, remains unchanged. However, the introduction of a CCP facilitates netting and 34,011 transactions were instructed for settlement resulting in reduction of transaction required for settlement and a netting ratio of 42%.
The successful introduction of the CCP service is the direct result of extensive co-operation between the Exchange and its clearing provider and the support and commitment of our mutual members.
A central counterparty is a specialised clearing institution which facilitates securities trading by standing between buyers and sellers to ensure that money and securities change hands smoothly and efficiently, with minimum counterparty risk.
There are numerous benefits of utilising a CCP such as: standardised processing which translates into lower operating costs and greater efficiency, reduced counterparty risk through better risk management practices and a reduction in the number of trades requiring settlement, thereby improving liquidity and effectively increasing market capacity.
As a direct result of the successful launch of the CCP it is planned to extend the service to include SWX traded ETFs.
ETFs will become eligible for clearing on 15th October 2007 and will therefore as of this date also be protected by the enhanced risk measures employed by SIS x-clear.
This will result in around 50% of all SWX trading being eligible for clearing.
Heinrich Henckel, CEO SWX Swiss Exchange, stated “I am delighted that the SWX CCP service has now been successfully implemented. The expansion of CCP services further enhances the Swiss Value Chain and the attractiveness of our market by improving risk management and minimising risk for our members in eligible products. Not least, it also reduces cost due to economies of scale in clearing. The speedy expansion of our service to include ETF’s is a welcome enhancement which will continue to improve our market”.
Marco Strimer, CEO of SIS x-clear stated: "The CCP for SWX cleared products is built on the existing, modern and scalable risk management system that is currently applied to clear the virt-x market. We are pleased to deliver robust and customer-focussed clearing services for this important market segment and ensure that our client’s expectations of increased market efficiency and increased settlement performance are fully achieved.”
